"You've got to build the police and the security capacity and then you can follow in to assist the citizens," Sen. John Kerry (D-Mass.), the chairman of the Senate Foreign Relations Committee, told ABC News Tuesday during a visit to Peshawar. "You can't yet spend the money there. It is too dangerous there."

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That is an unusual admission as the United States tries to convince Pakistanis it is shifting from supporting the military to supporting law enforcement, civil society and development. That shift, Kerry admits, is long overdue and is necessary if both Pakistan and Afghanistan can be saved from two rising militancies.

"If you can begin to bring law enforcement to the task, then the majority of people who don't want to live under those insurgents or under the Taliban will dare to stand up," Kerry said during an interview in the historic Frontier Corps fort, perched at the top of Peshawar.

"But in the absence of that, if you have a total vacuum, people are scared and they'll go underground, and that's been what's happening in the past months while we've been more focused on Iraq."

Increasingly, the United States has linked success in the war in Afghanistan to providing alternative futures to impoverished and poorly governed populations on both sides of the porous Afghan-Pakistan border. Populations that include men like Khursheed of North Waziristan.

Khursheed has to feed his five children on $1.50 per day. He lives in the heart of the militancy in the tribal areas along the Afghan border. Sometimes, he goes to sleep hungry. Other times, he has enough money to feed his family rice. He has decided that he can't afford to raise his own children, so he is sending two of them to his brother-in-law.

"I don't see any future for them," he told ABC News recently, standing outside his mud home, holding the wheelbarrow that provides his livelihood.

Development Money Aimed at Helping Impoverished in Pakistan, Afghanistan

It is people like Khursheed who the United States hopes to reach with a massive new influx of development money, cash designed to cut the poverty that undermines the government and can draw men to the militancy.

The Enhanced Partnership with Pakistan bill, better known as the Kerry-Lugar legislation, provides Pakistan development aid "to help them build some schools out here, to be able to build some of the roads they need, to have a health clinic, so they can see that their lives are actually better if they choose to work with the government," Kerry says. "If you don't show an improvement then they sit there and they're subject to the Taliban coming in and saying, well look, there's been a Pakistan for 60 years but your life hasn't changed."

The bill also provides Pakistan with money for police and paramilitary training. The United States has already given more than $300 million dollars in counter terrorism funds, according to the United States embassy in Islamabad. But still, Pakistan's police are woefully unprepared to combat terrorists, and Pakistan's military and paramilitary have proven unable to move militants out of much of Pakistan's Northwest Frontier Province and neighboring tribal areas.

After failing to remove a powerful Taliban presence in Swat during 18 months of on and off again fighting with the military, the provincial government chose to make a peace deal with the Taliban. Just this week Pakistani President Asif Ali Zardari signed the peace deal in the Swat Valley, allowing for the imposition of Islamic law, or sharia.

Much of the government has argued the deal will bring peace to a restive province, but critics argue it is a capitulation to the Taliban at the point of a gun and would allow the Taliban to grow stronger in the surrounding areas.

Indeed, late last week Taliban from Swat entered Buner, a formerly peaceful district to the South where residents had been able successfully withstand militant attempts to infiltrate. But this time, residents were unable to resist.

Kerry Says Pakistan Threatened by Taliban Insurgency

"Pakistan itself is threatened by this insurgency and the insurgency is slowly moving into the main parts of Pakistan," Kerry said. He called the peace deal a "concern" and acknowledged that while the paramilitary frontier corps had made great strides at combating the militancy, Pakistan still needed to acknowledge the extent of the threat the Taliban posed.

"The urgency is greater than the response we've seen thus far," Kerry said.

In Buner, the Taliban entered the area driving expensive vehicles and appearing to carry weapons not usually available for sale in the marketplace. They proved too much for a relatively ragtag village fighting force.

"How can you fight the military?," one resident asked an ABC News reporter, implicitly accusing the Pakistani army of supporting the militants.

It is a widespread belief in the Northwest that the Pakistani army and its powerful spy agency the Inter-Services Intelligence, or ISI, is maintaining links to the Taliban and Punjabi militant groups it helped create to fight in Afghanistan and Kashmir.

The military denies that, and recently the head of the ISI refused a one-on-one meeting with Special Envoy to Pakistan and Afghanistan Richard Holbrooke after the latter had accused the ISI of active links with the Taliban.

Kerry said he was convinced the ISI and Army leadership were opposed to harboring militants groups. But, he admitted, "Is it possible that people who originally had ties to the Taliban who may no longer even be affiliated with the agency… have some ongoing connection? That's possible, sure."

Kerry's vision for the tribal areas focuses on reinforcing a proud Pashtun culture on both sides of the border that has been decimated by the Taliban and, to a lesser extent, policies enacted under President Pervez Musharraf.

Drone Attacks Have Inspired Anti-Americanism

But he also believes in a covert campaign that has pounded the tribal areas with some 40 missile attacks launched by unmanned aerial drones operated by the CIA. Those attacks have, largely, inspired anti-Americanism across the country.

"I've looked at them very very closely. And I asked for a CIA briefing to go through every single attack and understand the targeting and what the results really were. And I've also checked them against what they know here and the judgments they've made. And I would have to tell you that the answer to that is, I believe, yes, they have been worthwhile, and as complicated as it is, I think it's made us safer." Kerry said, going farther to acknowledge the CIA role in the attacks that most U.S. officials are willing to do on the record.

Kerry argued the drone attacks had been "ginned into a political tool" in much of Pakistan, but were actually popular in the tribal areas, so long as they did not cause civilian casualties and targeted foreign fighters, usually Arab, who are living among the Pashtun villages along the border.

"The fact is that many people out here understand that that is making their lives safer," he said."

Indeed, one tribal resident who spoke to ABC News agreed with Kerry.

"I am against the current drone attack policy. I think there should be at least one or two drones in every province," he said.